#CRE – Page 3 – Federal Financial Analytics

29 06, 2023

DAILY062923

Eliza Allen2023-06-29T17:22:46-04:00June 29th, 2023|2- Daily Briefing|

Powell Stands by Big-Bank Reg Rewrite

In remarks today, Chair Powell echoed Vice Chair Barr’s “humble” comments yesterday about the need to anticipate additional risks despite banking-system resilience, noting that rules and supervision require review. Building on the Fed’s internal SVB review (see Client Report REFORM218), Mr. Powell suggested that the Fed had succumbed to the “natural tendency” to fight the last war and needs now to update its standards to address new risks.

FTC Finalizes Tough New Guidance On Deceptive Reviews And Endorsements

The FTC today finalized an updated version of its Endorsement Guides, setting new standards for the advertising and endorsement behavior that may constitute unfair or deceptive practices. These include implementation of a Consumer Review Fairness Act ban on standardized contract provisions penalizing consumers for negative reviews, a practice the CFPB last year called “gag” clauses that are banned under this law.

Banking Agencies Encourage Banks To Go Easy On CRE Borrowers

The banking agencies and NCUA today finalized changes to troubled-loan standards in a policy statement that is substantially similar to last year’s proposal.

Daily062923.pdf…

28 06, 2023

DAILY062823

Eliza Allen2023-06-28T17:21:14-04:00June 28th, 2023|2- Daily Briefing|

Biden Predicts End to Overdrafts

In a speech today detailing “Bidenomics”, President Biden continued his administration’s campaign against “junk fees,” specifically targeting overdrafts.

Fed Branch Approval Faced Unusual Bowman Protest

With a cryptic statement, FRB Gov. Bowman has taken the unusual step of protesting a branch application which she and all other governors approved. The issue appears to be the fact that two commenters objected to the branch application on grounds that the bank (Vantage in Texas) discriminates against African American borrowers. The Fed’s formal approval notes only these comments and otherwise approves of the bank’s fair-lending record, also noting its satisfactory CRA rating and the fact that the bank is principally a commercial lender.

Fed Finds Big Banks Resilient, Still Wants More Rules

The Fed’s stress-test release today attempts to meld both the Board’s finding that banks are not only resilient, but also “well-positioned” for a severe recession with Vice Chairman Barr’s plans to rewrite an array of new rules (see Client Report FEDERALRESERVE72) that stress tests are only one measure of strength the “resilient” evidence itself.

Daily062823.pdf…

22 06, 2023

DAILY062223

Eliza Allen2023-06-22T16:52:30-04:00June 22nd, 2023|2- Daily Briefing|

Gruenberg: End-Game Almost Done, Will Be Tough

In remarks today, FDIC Chair Gruenberg erased any of the doubt Chair Powell left yesterday as to the nature of the U.S. end-game capital rewrite (see Client Report FEDERALRESERVE74).

FSB Tackles Third-Party Risk

The FSB today issued a consultation on third-party vendor management, with comments due by August 22.

Senior Democrats Reintroduce Fed Racial Equity Measure

HFSC Ranking Member Waters (D-CA) and Senate Banking member Sen. Warren (D-MA) today reintroduced legislation that would create a new racial justice mission at the Fed.

Powell Announces Internal Endgame Draft, Defends FRB-SF

At a Senate Banking hearing today covering much of the territory discussed in yesterday’s HFSC hearing (see Client Report FEDERALRESERVE74), Chairman Powell noted that an endgame draft proposal has been circulated internally, he has been briefed on it and that all governors will have ample time to review it.

Daily062223.pdf…

16 06, 2023

Daily061623

Eliza Allen2023-06-16T16:49:58-04:00June 16th, 2023|2- Daily Briefing|

Waller Separates Monetary, Stability Policy

FRB Gov. Waller today defended recent rate hikes against criticism that they undermine financial stability, noting that monetary and stability policy are inter-related but must generally be addressed with different tools.

Brown-Scott Clawback Bill Adds Enforcement Teeth

In his first legislative mark-up since assuming the chairmanship in 2021, Banking Committee Chairman Brown (D-OH) will convene voting next Wednesday on compromise compensation-reform legislation on which he and Ranking Member Scott (R-SC) have agreed.

Hsu Warns of Tokenized-Settlement, AI Risk

Acting Comptroller Hsu’s speech today highlights both the benefits and risks of tokenization and AI, urging parallel development of new technologies and essential controls.

Democrats Try Again To Mandate TILA, CFPB Small-Business Authority

Banking Committee member Sen. Menendez (D-NJ) yesterday introduced legislation (S. 2021) along with Small Business Committee Ranking Member Velazquez (D-NY) (H.R. 4192) to extend TILA protections to small business lending, also giving the CFPB authority in this sector.

Fed Fears Little Systemic Risk

The financial-stability discussion in today’s report from the Federal Reserve ahead of next week’s hearings generally reiterates conclusions from the most recent Fed financial-stability report (see Client Report SYSTEMIC96): banks are generally sound and resilient and, despite MMF worries, most other vulnerabilities are of only moderate systemic concern.

Fed’s Long-Awaited Master-Account Database Goes Live

Conceding to a long-resisted and now statutory demand (see FSM Report PAYMENT25), the Federal Reserve today published the first database detailing who has or seeks access to Reserve Bank master accounts and services.…

14 06, 2023

DAILY061423

Eliza Allen2023-06-14T17:01:12-04:00June 14th, 2023|2- Daily Briefing|

OCC Lays Out Revised Risk Warnings, Admonitions

The OCC today released its semiannual risk assessment, with much of its context based on data as of September 2022 and thus of limited value forecasting near-term threats. The OCC is careful to advise that the banking systems and institutions with federal charters have been the focus of special OCC attention since the mid-March failures.

McHenry Heightens GOP Opposition to FSOC Systemic Standards

Perhaps because he was unable yesterday to quiz Secretary Yellen (see Client Report REFORM227), HFSC Chairman McHenry (R-NC) today sent Ms. Yellen a letter taking sharp issue with proposed FSOC nonbank-SIFI designation standards (see FSM Report SIFI35). Arguing that FSOC’s longstanding precedent is not to designate nonbanks although this was done after Dodd-Frank (before Trump-era de-designations), Mr. McHenry states that the new approach focuses only on size and thus ignores the extent to which activities pose risk.

Powell Says No to ONRRP Redesign

At his press conference today, Chairman Powell denied that the ONRRP has any adverse impact on deposit inflows but said it and reserve levels will gradually drop as Treasury rebuilds its cash reserves. Further, the Fed is not open now to reducing RRP rates.

Daily061423.pdf…

15 05, 2023

DAILY051523

Eliza Allen2023-05-15T17:23:44-04:00May 15th, 2023|2- Daily Briefing|

Yellen Highlights Investor – Not Uninsured-Deposit – Runs, Buoys Sector Mergers

In an interview over the weekend, Treasury Secretary Yellen struck a decidedly different tone on bank mergers than voiced in the Administration’s policy prior to recent failures.

Gensler Outlines Top Financial Stability Concerns

In remarks today, SEC Chair Gensler outlined his financial-stability priorities.

Failed-Bank CEOs Defend Themselves, Contest Need For Receivership

Ahead of testimony tomorrow before Senate Banking, the CEOs of SVB and Signature have filed statements defending their actions and those of their colleagues.

FHFA Seeks Views On New Pricing Framework

Following last week’s announcement that it would postpone its controversial decision to retain an upfront fee related to a borrower’s debt-to-income level, the FHFA today released a Request for Input on the Enterprises’ single-family pricing framework as well as the process for setting their upfront guarantee fees.

Barr Stands His Supervisory, Regulatory Ground

Vice Chairman Barr’s testimony for Congressional hearings this week has just been released along with the Board’s 2023 supervision-and-regulation report.

Gruenberg Sticks To His Guns

FDIC Chairman Gruenberg’s Congressional testimony largely recounts prior statements about the condition of the banking system, recent bank failures, the new special-assessment proposal (see FSM Report DEPOSITINSURANCE120), and the agency’s deposit-insurance reform conclusion (see Client Report DEPOSITINSURANCE119).

Daily051523.pdf…

24 03, 2023

FedFin Analysis: Whom and What the FDIC and Fed Can Save How

Arezou Rafikian2023-03-24T17:05:38-04:00March 24th, 2023|The Vault|

Recent editorials and other media have often said that the FRB and/or FDIC have powers or taken actions that is not the factual case as we understand it. Members of Congress also appear sometimes willing to make assertions about what agencies can do now even if it is unclear if there is statutory authority to do so. We have provided individual clients with key clarifications, but do so now more generally to support strategic and advocacy decision-making. Of particular importance is the authority the FDIC is said to have or lack related to uninsured deposits; as detailed below, the agency actually has significant authority to do so as well as even to back BHC debt, as long as certain stringent conditions are met. As detailed in FSM Report RESCUE65, Congress limited both the FDIC and Fed in hopes that….

The full report is available to retainer clients. To find out how you can sign up for the service, click here and here.…

24 03, 2023

RESCUE79

Eliza Allen2023-03-24T16:30:20-04:00March 24th, 2023|5- Client Report|

FedFin Analysis: Whom and What the FDIC and Fed Can Save How

Recent editorials and other media have often said that the FRB and/or FDIC have powers or taken actions that is not the factual case as we understand it. Members of Congress also appear sometimes willing to make assertions about what agencies can do now even if it is unclear if there is statutory authority to do so. We have provided individual clients with key clarifications, but do so now more generally to support strategic and advocacy decision-making. Of particular importance is the authority the FDIC is said to have or lack related to uninsured deposits; as detailed below, the agency actually has significant authority to do so as well as even to back BHC debt, as long as certain stringent conditions are met. As detailed in FSM Report RESCUE65, Congress limited both the FDIC and Fed in hopes that the Dodd-Frank orderly-liquidation authority (OLA, see FSM Report SYSTEMIC30) would permit orderly resolution of even the largest banks and nonbanks without long-term federal support; a subsequent FedFin report will bring the assessment of OLA powers into the current crises’ context given that Congress will surely seek to determine why the FDIC and its sister authorities chose to provide taxpayer support rather than deploy OLA.

RESCUE79.pdf…

23 03, 2023

DAILY032323

Eliza Allen2023-03-23T17:09:59-04:00March 23rd, 2023|2- Daily Briefing|

OFR Study Predicts Household Gains, Banking Instability From Digital Currencies

A new OFR working paper concludes that full integration of digital currencies into the economy would reduce financial-system volatility and improve household welfare, but also increase the probability of a banking crisis.

HFSC Poses Still Tougher SVB/SBNY Resolution Questions

Following tough GOP letters to the Fed and FDIC earlier this week, HFSC Chairman McHenry (R-NC) and Subcommittee Chair Hill (R-AR) last night sent even sterner missives to Chairman Gruenberg and Secretary Yellen.

Bipartisan Push Begins For CEO Clawbacks

Ahead of its first of many hearings on the collapse of SVB and SBNY, Senate Banking Chairman Brown (D-OH) and Ranking Member Scott (R-SC) today sent letters to the former CEOs of the banks demanding that they answer for the bank failures, noting also that they will be expected to testify before the Committee if they are unable to do so next week.

OFR Blog: CRE, Residential Markets Pose Little Systemic Risk

Despite growing concerns about CRE and even potential systemic risk, an OFR blog post today concludes that neither the residential nor commercial real estate market poses a significant threat to the financial system.

Basel Stands By Its Rules, Contemplates New Supervisory Standards

The Basel Committee’s release following its March 14 meeting unsurprisingly notes the bank failures preceding it just days before, but attributes them principally to poor risk management in the face of rising rates.

GSEs Seek Public Comment on Credit Score Model Transition

The FHFA today announced…

22 03, 2023

DAILY032223

Eliza Allen2023-03-22T17:37:57-04:00March 22nd, 2023|2- Daily Briefing|

FTC Builds On Treasury Cloud Concerns, Seeks Competition, AI Views

Signaling apprehension about a number of risks outlined in a recent Treasury report, the FTC today requested comment on the business practices of cloud computing providers.

Scott, Warren Reach Over Partisan, Ideological Divide to Blast the Fed

Demonstrating the confluence of populist and progressive thinking about the Fed we anticipated at the start of this year, Sens. Rick Scott (R-FL) and Warren (D-MA) have introduced legislation mandating that the Fed’s inspector general be fully independent of the chair and board of governors.

Fed Under Still More Pressure to Boost Regional-Bank Supervision

Sen. Warren (D-MA) continued her prolific letter-writing campaign, today also joining with Sens. Duckworth (D-IL), Blumenthal (D-CT), Sanders (I-VT), Reed (D-RI), Hirono (D-HI), Markey (D-MA), King (I-ME), Whitehouse (D-RI), Smith (D-MN), Van Hollen (D-MD), and Schatz (D-HI) to call upon Vice Chairman Barr quickly to heighten regulatory standards for banking organizations between $100 and $250 billion.

Powell Protests Suggestions Of Fed Supervisory Error

At his press conference today, Chairman Powell sought to defend the Fed so vigorously that some of his comments may ignite still more criticism.

Yellen Denies FDIC-Coverage Rewrite, Suggests Need for Liquidity-Rule Revisions

In her appearance today before the Senate Appropriations Subcommittee on Financial Services and General Government, Treasury Secretary Yellen refuted press reports that Treasury is considering significant deposit-insurance coverage expansion, saying only that the banking system is safe and it is too soon to consider structural reforms.

Daily032223.pdf…